The BSB should begin regulating both ABSs and non-ABS entities – such as barrister-only businesses and legal disciplinary practices – next year.

The BSB’s main board last week approved a more flexible approach to responding to entity regulation, with less included in rules and more in the BSB’s entity regulation policy statement.

With the Legal Services Board expected to give a decision on the BSB’s revised handbook on 19 July, a working group has been working on a new section relating to non-ABS entities that it will seek to add to the handbook. These are now called ‘legal services bodies’.

BSB vice-chair Patricia Robertson QC, who heads the handbook working group, told the meeting that “it’s very hard to legislate now for things that people might want to do”.

The regulator aimed to take a “risk-based approach” and one which focused on “a particular regulatory niche”, and in policy terms “it’s foolish to try and foresee in minute detail everything that people out there might actually want to do”.

Ms Robertson said an advantage of putting “less in the rules… and more in the policy statement” was that the statement was a “flexible instrument” that could be changed without “having to go through a formal rule change application to the LSB” when changes were required.

Three significant elements had been enshrined in rules in earlier drafts but had been moved to the policy statement, she said. These were that at least one practising barrister was a manager and owner of the entity, that every owner must be a manager, and the requirement that the entity conduct only legal activities.

Explaining the first of these changes, the QC said that the reason for it being in the rules was the need for somebody to be present “who actually understands the nature of the duties that bear on those exercising rights of advocacy”. But there were other ways of satisfying this requirement and it was better to move it to the policy statement.

Similarly, demanding that entities only conduct legal activities seemed appropriate now but the market was likely to change quickly and the BSB should be “fleet of foot in terms of changing ourselves to match market developments as we observe them”, she said.

Urging board members to approve the shift – which they did – Baroness Ruth Deech, the BSB chair, said: “We have got to be ready. We have got to catch the wave and go with it… and enable legal services to be there for the public in this new form if that is what is necessary.”

She said that expanding the policy statement to bring greater flexibility was important, “given the turmoil out there” in the legal marketplace. She added that it was “a bit like an elephant – you’ll know it when you see it”, meaning that when the BSB saw “an advocacy focused body, we will recognise it without tying ourselves in too many knots”.

Also at the meeting the BSB’s independent observer, Isobel Leaviss, reported on the BSB’s complaints and disciplinary system. She observed the professional conduct department at work and reviewed case files for a total of 55 days from June last year to May 2013.

She concluded: “I am able to provide the [BSB] with a substantial level of assurance that… the complaints system has worked well and in accordance with its aims and objectives.” Where she had made recommendations to improve case handling, these had been accepted and most had been implemented, she noted.

Legal Futures Blog

Written in honour of Malcolm Young, recently deceased founding member of AC/DC, there are nine references to AC/DC songs throughout this article. We will send a £20 iTunes voucher to the first person who gets in touch to tell us what they are. The forces that are driving change in the legal profession are wide and varied. The ability of law firms and individual solicitors to respond positively and innovatively to these challenges will determine who survives and prospers. Competition for new business is fierce, a dog eat dog world, one might say. Which brings us to AC/CD. Not my favourite rock band, but an acronym for Attract, Convert, Close and Delight – the four pillars of inbound marketing.